Economic spillover from renewable energy industries: An input-output analysis

Abstract

This study aims to identify the changes in the economic relations between industries resulting from the dissemination of renewable energy in Korea. Although previous studies have examined the ripple effect of renewable energy using an input-output table, there are limited studies that have performed an accurate analysis due to the absence of real economic transaction data for renewable energy and other industries. Thus, an input-output analysis was performed using actual data for 2010 and 2015 as well as 2020 estimated by RAS method. Backward and forward linkage effects and inducement effects were estimated. Specifically, the renewable energy value chain industries were classified into Raw material, Machine part, Infra structure, and End product. The main findings are: (1) the effect ratio of renewable energy industry decreased to 0.9572 reaching a similar level to the existing electric power industry; (2) the production inducement effects were 1.1278(2010), 0.7016(2015), and 0.7203(2030), and value-added inducement effects were 0.6043(2010), 0.3860(2015), and 0.4069(2020); and (3) the proportion of inducement effect on the service industry decreased approximately from 40% to 34%. These findings show how the renewable energy industry has changed from the early stages to the present and its economic importance in other industries resulting from renewable energy production and distribution. This study provides basic data for diagnosing the economic spillover and establishing energy policies due to the dissemination of renewable energy.